Thread: Archive News - Iraqi Dinar Think Tank - 06/10/2010 - 24/01/2011

Investment Authority show fear of the withdrawal of investment companies on the back of Tuesday's bombings

showed the national investment, Wednesday, fears of the withdrawal of investment companies against the backdrop of bombings that occurred on Tuesday night and killed more than 400 people dead and wounded.

The chief investment Sami Araji told the Kurdish news agency that "blasts cruel that occurred yesterday, and claimed the lives of tens of innocent people will affect negatively on the reality of investment of foreign companies in the country dramatically after the evolution of their work is evident in the recent period."

He pointed out that "the bombers wanted to hit yesterday and the security infrastructure to deliver a message to the outside world that Iraq is still a country suffering from the fragility of security does not fit all aspects of the work."

And that "the National Commission for Investment made great strides in attracting hundreds of foreign companies in the last period, which saw an improvement in security, evident in the country, but there is concern about the withdrawal of these companies as a result of Tuesday's bombings."

The capital, Baghdad on Tuesday, 22 bombings, including 13 by car lighter, and nine explosions by Katyusha rockets and mortar shells.

He said the "loss of security, lack of centralized investment decision in the country are a major impediment to attracting more investment companies for the reconstruction of the country."

Announced that the national investment in earlier that the obstacle to attracting investment companies ownership of the land and the failure to protect the money of the investors.

And signed the national investment, last Friday, a memorandum of understanding with the government banks to protect the funds of investment companies, which is building housing complexes, and called for the consolidation of central decision on investment projects for the advancement of the reality of the projects.

The National Investment Commission approved in 2007 a new law to invest in Iraq, according to the law is the body responsible for all strategic investment projects of a federal nature exclusively, while the regional and provincial bodies responsible for investment planning and granting investment licenses in their areas.

http://www.aknews.com/ar/aknews/2/193056/

Abadi: You may choose to resort to "a temporary chairman of the parliament" until the resolution of the Iraqi position

The leader of the National Alliance MP from the coalition of state law, Haider al-Abadi, "If you do not provide the Iraqi List, a candidate for the Presidency of the parliament, it is better to open the door of the nomination of others and perhaps will be agreed implicitly to elect a temporary chairman of the House of Representatives, to the successful holding of the parliamentary session of the first, until the resolution of existing Iraqi position "

And also said "We have plenty of time to resolve contentious issues in the parliament and discuss the outstanding issues relating to form the next government," noting that "the prime minister will not resolve the constitutional vote in parliament."

http://alanenews.org/news.php?action=view&id=2378

Basrah receives first meal of the petrodollar funds

The governor of Basra province received the first installment of funds petro-dollars, which amounted to 163 billion dinars, out of 800 billion dinars.

He said Cltag Aboud Kurdistan News Agency (Rn) on Wednesday that "the province of Basra received today the first installment of funds petro dollars amounting to 163 billion dinars out of 800 billion dinars would be spent on several energy projects, sewage and water that has been announced in the earlier periods in a number of seminars held in the province."

He pointed out that "the sole province of Basra, which received large sums of petro-dollars and has been allocated for the most part of electric power projects."

The other hand, Vice President of the Provincial Council Ahmed Sulaiti (AKnews) that "despite the allocation of amounts of petro-dollars to maintain the problem of electric power situation in the province will worsen in the next summer and will not be solved at all, and to transmit electrical projects to companies that are not eligible for such big projects."

He explained that "the executive government responsible for delays in the implementation of projects petro dollars and projects of developing regions."

The Iraqi Council of Representatives had approved the allocation of the amount of one dollar to the provinces produced per barrel of product per barrel of dollars were siphoned and filtered, and one dollar for the production of every 150 cubic meters of natural gas.

The province of Basra (550 km) south of Baghdad, one of the richest provinces of Iraq also has oil and ports, border trade with both Iran and Kuwait.

http://www.aknews.com/ar/aknews/2/193058/

Egyptian Minister of Petroleum: The objective of our visit to Iraq to support oil cooperation

The Egyptian Minister of Petroleum Sameh Fahmi, on Wednesday, said his visit to Iraq aims to activate joint cooperation to support the field of oil between the allowances, noting that he is visiting Baghdad at the head of the largest delegation in the history of Egypt.

This came during a meeting with the Egyptian minister of Iraqi Prime Minister outgoing Nuri al-Maliki and Oil Minister Hussain al-Shahristani, in Baghdad, according to a statement issued by Maliki's office.

Fahmi said his country's support for Iraq in all fields, saying "today we came to Iraq at the invitation made by al-Maliki during his recent visit to Cairo."

Al-Maliki visited Egypt in 19 of the month of October last in the framework of a tour of Arab and regional, including Syria, Jordan, Iran and Turkey.

"Our visit is a joint program with Iraq to activate cooperation and support in the field of oil," the statement said.

He said Fahmi said, "We are in this visit at the head of the largest delegation in the history of Egypt, which includes a large number of representatives of Egyptian companies."

The statement quoted Maliki as saying, "We in Egypt in our last visit about how to support the work of Egyptian companies in Iraq, so we want with the broad participation of these companies in the process of construction and reconstruction in addition to its cooperation with Iraqi companies."

It pointed out that al-Shahristani and understanding a contract "round of talks and discussions, which came out definitely to increase cooperation between the two countries in the fields of oil and gas, especially in southern Iraq in Basra province and to activate the previous agreements between Iraq and Egypt in this area, and the need for participation of Egyptian companies in the process of reconstruction and construction".

This is the second visit by the understanding of Iraq after his first visit which was the fifth of October last.

http://www.aknews.com/ar/aknews/2/193117/

Oil is considering reviving the Iraqi oil pipeline - Saudi Arabia

The Ministry of the Iraqi oil pipeline to reopen Iraqi oil - Saudi stalled for nearly 20 years, following the Company offers a Saudi request to work on the rehabilitation of the tube.

The Executive Director of the company "Seeds Diamond" Saudi oil Ali Maher said that his company "made a formal request to the Iraqi Oil Ministry to re-oil pipeline Iraq - Saudi Arabia to work, which extends about 626 km and transported Iraqi oil to ports in Yanbu Saudi Arabia." And declined to reveal more details, saying only that his company was awaiting a response from the ministry on the display. The Ministry of Oil that it was studying the request.

He said its spokesman, Assem Jihad, "The ministry welcomes such claims contribute one way or another in the promotion of bilateral relations."

He added that "Iraq welcomes any cooperation with the Arab oil will not stand against that, and the ministry is keen on activating Arab cooperation in the petroleum industry, and urges Arab companies to implement projects to Iraqi territory."

He explained that "the escalation of the pace of oil production requires the creation of export outlets to accommodate many of the quantities of crude oil and marketing."

The Iraqi pipeline - Saudi Arabia, which it opened in 1986 the two companies, "Mitsubishi" Japanese and "T or F" Hungarian stopped working in August 1990 following the Iraqi invasion of Kuwait.

http://translate.google.co.uk/transl...n&hl=&ie=UTF-8

Economists call for financial transparency law passed in 2011 with the balance

Economists called the Iraqi government to pass a law of financial transparency with the file offset 2011 in order to reduce the manipulation of public money.

And said an economic expert Mikdadi Fatima Ali told the Kurdish news agency (Rn) that "the Iraqi Finance Ministry by the provision of the law of financial transparency with the budget in 2011 to the Iraqi parliament to study it and then passed to the follow-up of funds at its disposal the financial ministries and governmental bodies."

She explained that "the international economic system confirms that the budget for 2011 is identical to the terms of the global economic unless accompanied by the law of financial transparency during this year," noting that "the budgets of Iraq in previous years, lacks the foundations of exchange restrictions the financial world as it was not attached to the law of transparency of financial that saves money year manipulations of government officials in it. "

The report of the International Partnership Budget called Iraq on 28 October that he "failed to achieve basic standards of transparency and accountability of the national budgets."

On the other hand said the financial expert for the full OS Kurdistan News Agency (Rn) "The Iraqi government has to strive to provide accurate protection appropriate to protect the infusion of public money and tampering by government officials which Iraq lost a lot of money."

"I imagine that the nature of the financial system in Iraq needs to review the real exchange rate, especially in terms of both its operational budgets, and complementary," noting that "the Ministry of Finance in the deployment strategy of the budget of any paper before preparation of the budget in its final form and presented to the Cabinet."

He called the Iraqi Central Bank Board of Supreme Audit systematic scrutiny in the financial budgets for previous years.

And usually sees the preparation of budgets, the country's financial and approval delays by the government and the House of Representatives because of the large number of objections and criticisms on some of its clauses, most notably the aspects of exchange and the financial allocations for some government institutions and the presidencies of the three

As member of the organization said, "Economists" Sana Jabri's (Rn) "The 2011 budget assumes that government ministries to submit a monthly report to the Council of the Prime Minister on the financial expenses."

She pointed out that "the Ministry of Finance in the preparation of the budget and the details is that a government committee on the economy and Graduate membership of the CBI, the Board of financial oversight mechanism to oversee the investment of the funds the budget."

She added that "progress the Iraqi economic system based on structural capacity and staffing to offset the country's financial, especially in recent years with the accurate disclosure of the end of each fiscal year for expenses."

The Council postponed the prime minister to discuss the budget in 2011 to an undisclosed time, in order to address the problem of the difference between the price of oil and oil ministries of finance ministries.

According to the Financial Administration Act, No. 95 of 2004, the government should prepare a budget for the following year, in September of each year, in preparation for discussion at the House of Representatives for approval.

The Iraqi Finance Ministry announced last month that the finalization of the draft budget for Iraq in 2011, and the new budget allocates a large share of investment, and to support the government's development strategy that will continue for the next four years.

The initial budget for Iraq in 2011 about 86 billion and $ 400 million, assuming the price of oil is $ 70 per barrel, an increase of up to 14 billion dollars in the last budget.

Many feel that the delay in adoption of the budget would put the country in the midst of another crisis, will reflect negatively on service projects and investment in the country.

Revealed the Ministry of Finance reduced the gap in the cash budget in 2011 by 12% percent of the budget in 2010

Economists expect that the budget of 2011 would not address the inflation suffered by the Iraqi economy because of inflation the purchasing power of goods and imported goods as well as the absence of centralized economic decision in the country.

The Central Bank of Iraq announced a low rate of inflation in Iraq to 2.7%, which encouraged the launch of liquidity for banks by 5% of the existing legal cash reserve has, in order to expand lending operations and advancing the development.

Known that excessive inflation in the general level of prices and rising incomes in cash or a component of cash income such as wages or profits as well as high costs and excessive in the creation of cash balances.

http://www.aknews.com/ar/aknews/2/193238/

IEA warns Iraq will miss 2017 oil target

Iraq will miss its target of producing 12m barrels of oil a day by 2017 and could take another 20 years to achieve even half that level of output, says the International Energy Agency.

In a draft of its annual World Energy Outlook report, the IEA gives a downbeat assessment of Iraq’s ambitions. However, it predicts its crude oil production will overtake that of neighbouring Iran “by soon after 2015”.

Iraq has awarded licences for the development of 11 major oilfields and, if all targets are met and investment of about $150bn takes place, production should reach 12m b/d in seven years. But the IEA stresses the mammoth nature of the task, saying that the “sheer scale of the required construction of infrastructure, coupled with political uncertainties, suggests that the expansion of capacity will be much slower”.

The report notes that “basic infrastructure, including road, bridges, airports and water supply, are all in need of repairs and expansion”.

Meanwhile, Iraq’s “existing export routes are also fully utilised and a major expansion of the shipping ports will also be needed”. Taking all this into account, the IEA projects Iraqi output of 6.5m b/d in the 2030s, compared with 2.5m b/d at present.

Lower production in Iraq should help Opec avoid a confrontation over output allocation among its members. Analysts have warned that such a dispute could endanger the cartel’s unity, which is critical to its ability to manage global oil prices.

http://www.ft.com/cms/s/0/def69f28-e...44feab49a.html

No anti-French bias in Iraq oil wins: Total

There was no bias towards American oil companies during the awarding of contracts to international oil companies to operate in Iraq, Arnaud Breuillac, Total S.A’s most senior executive in the Middle East has told Arabian Business.

Breuillac, who is regional senior vice president, exploration and production for the French energy major, said:

“It didn’t happen. There was objectively no reason. The reality is it was done in a fair way. They said if you have the industrial capability, then nationality does not matter. It was done in such a transparent way, no one can argue there was any bias.”

There had been much speculation at the commencement of the last Gulf war that France’s failure to participate militarily would see it kept away from the tendering process for access to Iraq’s vast mineral wealth. Breuillac said those fears were baseless.


“Not at all. And I don’t think that would have been in Iraq’s interests [for French companies to be excluded from the process]. All the contracts have been managed by the Ministry of Oil,” he said.

“They would qualify the companies purely based on reference capabilities to have done a similar job elsewhere in the world… You can see from the bid results, only two American companies have won contracts, Exxon Mobil and Occidental. Conoco and Chevron did not get any contract at all.”

Total have so far been awarded one contract in Iraq – to operate the Halfaya oil field in conjunction with China’s CNPC and Malayasia’s Petronas. Breuillac said Total had some concerns about the way the bidding process was undertaken.

He said: “The Iraq bid mechanism is essentially quite simple – there are two numbers to put in an envelope, production plateau and fee. We do not consider this to be the optimum way to manage long term sustainability, however, we do recognise that Iraq needs to reconstruct their oil and gas industry quickly, so this was probably the best way to achieve that.

“Because, clearly, it got the companies to be motivated by getting to a certain level of production quickly. We think that those contracts will be executed exactly as they are awarded, there will be nor revisions.”

http://www.arabianbusiness.com/no-an...l--359587.html

Could Kurdistan unrest hit UK-listed oil firms?

Foreign oil companies operating in Kurdistan have been thrust into the limelight, as the race for a new Iraqi Prime Minister gets underway.

A parliamentary session will be called on Monday which could see Nuri al-Maliki reappointed as Prime Minister after an inconclusive election in March rendered the country without a government.

The Sunni-backed cross sectarian Iraqiya bloc notched up the most seats, but Maliki's faction has since teamed up with other Shi'ite groups and minority Kurds in a move that may seem him keep hold of power.

Last month, the differing political factions came under pressure from the high court to resume sessions and reach an agreement on a coalition government, but the wait is a tense one for those companies operating in the northern oil province of Kurdistan.

There are over 25 international oil companies operating in the region, including UK-listed Gulf Keystone Petroleum (GKP) and Heritage Oil (HOIL).

In an investor update issued on Wednesday, AIM-listed Gulf Keystone spoke of the risks associated in an area plagued by fervent political unrest.

"The political situation in Iraq is unsettled and volatile. The political issues of federalism and the autonomy of regions in Iraq are matters about which there are major differences between the various political factions in Iraq.

"The current situation could create uncertainty for the group, in particular with regard to validity of title of the group's assets in Kurdistan and the allocation of revenue generated by those assets."

But with close to a quarter of the world's light oil reserves and home to vast unexplored opportunities, it is little wonder than foreign companies have seized their opportunity to build a portfolio in Iraq.

Kurdistan has long lured foreign operators with the promise of a production sharing agreement that allows for greater revenue to the companies themselves and the option to list reserves on their books - a major draw for shareholders of public listed companies.

The Kurds have awarded contracts to overseas oil companies since 2002 in an ambitious effort to hit one million barrels of oil per day within the next five years. However, its success was thrown into jeopardy late last year when a payment dispute led Kurdistan to halt oil exports to Baghdad, threatening to destroy the region's burgeoning industry.

The Kurdistan Regional Government and Iraqi authorities have since been gridlocked over the right to control the oil resources in Kurdistan, with Kurds believing it their entitlement to control their own resources while Baghdad argues all energy resources fall under the control of the national government.

James Hosie, equity analyst at RBC Capital Markets, says the situation still poses a huge questionmark for the industry.

"The outcome for those companies very much depends on how much say the Kurds get in the new government. The expectation is that the problem will get resolved one day but we have been waiting for a year to see a solution so the 'when' is still very much unknown."

But while uncertainty persists, it has done little to dampen feverish interest in those companies operating there, notably Gulf Keystone.

The company's shares have spiked this week, on a promising operational update. On Monday, chief executive John Gerstenlauer said he was "very encouraged" by recent log results and oil shows seen thus far in the group's Sheikh Adi-1 wells.

Furthermore, the company has focused on moving towards a domestic price for its Sargelu crude oil from its Shaikan-1 discovery.

The promising set of results set the rumour mill in drive with speculation that it had become a takeover target with a possible 250p bid, although analysts have been quick to rubbish the reports as "unsubstantiated".

David Hart, analyst at Westhouse Securities, said the interest in Gulf Keystone will gather pace on growing optimism that a resolution of some sort is on the horizon.

"There seems to be more optimism about finding some sort of resolution, particularly as a coalition government will need the Kurds on side and it will be in their immediate interest to have this dispute settled."

Fellow UK-listed Heritage Oil will no doubt also benefit from a settlement, given that Kurdistan plays a central role in its strategy.

The FTSE 250-listed firm which earlier this year sold off its assets in Uganda, said future plans for drilling in the region will focus on appraisal drilling on the Miran West structure which should kick off in the first half of 2011.

The company said it possesses a "very attractive prospective portfolio that has the potential to create significant shareholder value in the next year through several high impact exploration wells".

Despite its upbeat look, its shares have dropped sharply since it released its interim results at the end of August, amid speculation that it could lose its Miran licence.

However, analyst Melanie Savage at UBS - which recently initiated coverage of the stock - believes the market has been wrong to factor in an 80% chance of loss into its shares.

"Heritage gains access to low geological risk exploration by operating in areas of relatively high political risks," she explained before tagging the stock with a 'buy' recommendation and hailing it its top pick in the European exploration and production sector.

David Hart, analyst at Westhouse Securities, agrees that the company could benefit from renewed talk of a resolution in Iraq and has also tagged the stock with a buy recommendation.

"I suppose in some sense, the closer you get to the coalition, the closer you become to creating a firm hydrocarbon law," he continued, before adding that they have a strong balance sheet to fund further drilling in the province.

In a sign of confidence in the region, US mid-tier player Marathon Oil took a stake in four exploration blocks in Kurdistan late last month, marking its first foray into Iraq.

Samuel Ciszuk, analyst at IHS Global Insight, commented: "The entry of an IOC the size of Marathon will be taken as a significant confidence booster by the KRG and sends a particularly strong signal as it coincides with the central government's awards of three strategic gas fields to second or third tier bidders.

"Its entry will be interpreted by many as a vote of confidence in the KRG's ability to secure its upstream investors' interests vis-a-vis the Iragi government and ensure that even if the region's production sharing agreements have to be renegotiated, the terms would continue to be more profitable than those Iraq itself has offered."

However, Ciszuk warns that while Kurdistan is attempting to manoeuvre itself into the position of kingmaker, they could well overestimate their influence and thus push Iraq's other factions into uniting by demanding too much.

Now all eyes will fall to Monday's session to see what awaits the Kurdistan oil industry.

http://www.iii.co.uk/articles/articl...le_id=10121547

IMF - Middle East Copes with Legacy of Global Economic Crisis

A Commentary by Masood Ahmed, Director, Middle East and Central Asia Department, International Monetary Fund
Published June 2010 in MEED Middle East Economic Review

With the global economy gaining momentum, so too have economic prospects for the Middle East and North Africa. Aided by the pickup in oil prices and capital inflows and a resurgence in domestic consumption, output for the region is forecast to expand by 4.4 percent in 2010, up from 2.4 percent in 2009. But this positive outlook is clouded by some stress in the banking systems and sluggish credit activity across the region.

The region’s oil exporters—Algeria, Bahrain, Iran, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Sudan, the United Arab Emirates, and Yemen—were hit hard in 2009. Crude oil prices fell to $40 a barrel, real estate and asset prices plunged, and external financing dried up. The combined current account surplus of these countries fell to $53 billion in 2009, after having risen to $362 billion in the previous decade. Overall oil GDP contracted by 4.7 percent.

But continued government spending, along with central bank liquidity support and capital injections into the banking sector, helped mitigate the impact of the global economic downturn. As a result, non-oil economic activity expanded by some 3.6 percent in 2009.

These countries are now emerging from the crisis, thanks to a resumption of capital inflows and a rebound in crude oil prices to over $80 a barrel. Higher oil prices and output are projected to boost the current account surplus to $140 billion and oil-GDP growth to 4.3 percent. Non-oil sector activity is also forecast to grow by 4.1 percent. However, this is still heavily dependent on continued fiscal stimulus, since private investment—and credit to the private sector—remain sluggish.

Following an extended period of high growth through mid-2008, credit in these countries slowed by an average of almost 30 percentage points by end-2009 (Figure 1). In addition, losses on nonperforming loans have yet to be fully recognized and this is also contributing to banks’ reluctance to extend credit.

Policymakers must now balance the goal of reactivating credit with the need to strengthen financial regulation and enhance supervision, particularly in countries where excessive risk-taking occurred. Over the medium term, they also face a delicate task of unwinding financial sector support and phasing out fiscal stimulus once a solid recovery is achieved.

The region’s emerging markets—Afghanistan, Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, Syria, and Tunisia—fared relatively well in 2009. Their limited financial and trade ties—combined with positive spillovers from fiscal expansions in neighboring oil exporters—helped offset the impact of the global slowdown. Overall growth fell fairly modestly to 4.7 percent in 2009, from 6.5 percent in 2008.

Output growth in these countries is projected to stay flat at 4.7 percent in 2010, but with trade rebounding and investment and bank credit beginning to pick up, it is projected to increase to 5.2 percent in 2011. These growth rates, however, fall short of that in other emerging markets and remain below the levels needed to combat high rates of unemployment (Figure 2).

The main challenge for these countries will be to improve their competitiveness to raise growth and generate much-needed employment for a rapidly expanding workforce.

With continued weakness in European demand and competition from other emerging markets, sustaining robust export-led growth will require a sharper focus on macroeconomic and structural reforms to raise productivity. Amongst these, an improved business climate and reorienting education and training to equip new workers for the demands of today’s marketplace will feature highly on the agenda for most MENA countries.

http://www.imf.org/external/np/vc/2010/061510.htm